Road Equivalent Tariff (Commercial Vehicles)
The next item of business is a debate on motion S4M-02087, in the name of Elaine Murray, on the withdrawal of the road equivalent tariff from commercial vehicles. I call Elaine Murray, when she is ready, to speak to and move the motion.
10:21
I feel a bit like the filling in a sandwich—I apologise if some members find it rather unsavoury.
The Scottish Government introduced a road equivalent tariff pilot in the Western Isles, Coll and Tiree in October 2008. In 2010, the pilot was extended until April this year. The Government also commissioned Halcrow to undertake an evaluation of the pilot, which was published in July last year. Halcrow found that around 30,000 additional visits were made by ferry to the pilot area in each year of the pilot and that three quarters of the accommodation providers had experienced increased levels of occupancy. The decision to continue the RET scheme—indeed, to extend it to other islands over time—will be welcomed by tourism businesses in the islands that are to be included in the scheme. Some are to be included from October this year, Arran is to be included two years later and others have a more distant promise.
Halcrow also concluded that the RET scheme had made a positive impact on haulage businesses by lowering their total costs by around 10 per cent. Although Halcrow could not identify the total savings that were being passed on to the supply chain, in the document that it published in July it deduced that those savings may have offset other cost increases and enabled prices to be kept down. In addition, Halcrow found evidence suggesting that the difference in the price of fuel between the Western Isles and the central belt had reduced subsequent to the introduction of the RET scheme. Indeed, the Western Isles was no longer the most expensive place in Scotland to buy diesel, as it had been when the RET scheme was introduced in 2008.
Transport Scotland’s draft ferries plan, which was published in December last year, proposed replacing RET for commercial vehicles with an enhanced version of the discount scheme that had been in operation prior to the introduction of RET. It argued:
“In 93 per cent of cases, the reduction in ferry fares arising through the RET Pilot have been wholly or partially absorbed at some stage in the supply chain”.
Basically, it wanted the savings to be passed on in total. Of course, that means that the ferry savings may have helped to offset price rises in other parts of the supply chain—for example, in fuel costs. In October 2008, when the RET pilot was introduced, the average price of a litre of petrol was 117.1p. By March 2011, when the original pilot would have ceased, the price was 139p per litre, reflecting a rise of almost 19 per cent, and by November last year the price had increased by a further 2p per litre. The RET savings may indeed have been partially or even wholly absorbed by increasing fuel prices but, overall, they helped to keep prices lower than they would otherwise have been.
Those of us who represent rural areas know well that the prices of many items, including fuel, are higher in more remote towns and villages than they are in the central belt. We are told that transportation costs contribute to those higher prices. Therefore, it must be perfectly feasible that anything that reduces the cost of transportation will help to reduce prices. The reduction in the difference in fuel prices between the Western Isles and the central belt is very likely to be a case in point.
The draft plan argues that the increase in freight traffic in the first two years of the Western Isles pilot was only 8 per cent—the Government’s amendment says that it was 7 per cent—whereas the increase in car traffic was around 30 per cent. However, the figures varied greatly between routes. Freight traffic on the Ullapool to Stornoway route, which accounts for 57 per cent of all commercial traffic, increased by 7 per cent whereas on the Oban-Castlebay-Lochboisdale route it increased by 30 per cent.
The draft plan refers to the fares discount scheme of up to 15 per cent dependent on volume of business—which existed prior to the introduction of RET—and proposes that, for the Western Isles, Coll and Tiree, the maximum discount would be increased to 25 per cent.
Those proposals provoked consternation and even dismay among many businesses on the Western Isles and, indeed, even among their political representatives. The Scottish National Party MP for the Western Isles, Angus MacNeil, is reported in Hebrides News Today of 29 November as saying:
“I believe it is a major mistake to remove RET from the haulage industry … The whole point of RET is to help the economy of the islands, increasing transport costs for the haulage industry at a time of crippling fuel costs is disappointing. As recessions go, the Hebrides have fared reasonably well, this was I am sure helped by RET.”
On 6 December, Mr MacNeil declared himself to be
“fully supportive of the hauliers in the Outer Hebrides”
and stated that:
“The removal of RET will ultimately lead to an increase in prices for customers in our islands … If this is not sorted freight costs and prices will go up which could ultimately impact on jobs.”
Donald Joseph Maclean of Barratlantic Ltd joined him in that press release, stating:
“Since RET came into effect four years ago, we have been on the same working level as our mainland competitors and our turnover has increased by 20%, which made us competitive. The removal of RET is unimaginable.”
I understand the point that Elaine Murray is making about other peoples’ points of view, but I am anxious to get to the Labour Party’s position. Is the party against RET, as it was in 2007; is it, as it was in 2008, in favour of RET for individuals but not for hauliers; or is its position as it was in 2011: that everybody with a car in the Western Isles should get £400?
Our position is stated in the motion. We want a proper socioeconomic impact assessment.
Where and when in 2007 did anybody in the Labour Party say that we were against RET? I have looked for that and cannot find it other than in statements from the SNP saying that we were opposed to RET.
Mr MacNeil has commented many times on how essential it is that RET be retained. Indeed, I understand that his Scottish Parliament colleague Dr Alasdair Allan was originally supportive of the campaigns by his constituents and facilitated a meeting between hauliers and the Minister for Housing and Transport on 7 February. Prior to that, he expressed the view that
“businesses will make … a robust case for the retention of RET”.
The meeting duly took place, although invitations were extended only to a select few and some were offended that they were not allowed to come and make their point. Indeed, the Outer Hebrides transport group, which was recently formed to support the hauliers’ case, was disappointed to be offered only a 45-minute meeting with the minister on an issue of such importance to its members after travelling such a long way for the meeting.
I will be fair: the meeting was productive to the extent that the limit for eligibility to receive RET was extended from 5m to 6m, although I do not know whether that is intended to apply to all routes or only the Western Isles routes.
The following day, the Outer Hebrides transport group met Western Isles Council to call for a review of the proposals—something similar to what we are calling for. The council leader, Angus Campbell, commented that there had been an
“overwhelming response from the local business community condemning the proposals to remove RET on commercials as having a serious economic detriment in terms of job losses across a range of sectors.”
To be fair to the minister and Transport Scotland, there was further movement on 13 February, when Transport Scotland announced a transitional relief scheme under which the Scottish Government would subsidise 50 per cent of the increase in year 1 and cap any increase to a maximum of 50 per cent of the RET fare. A similar formula would be applied in years 2 and 3. That would mean that, for example, if the non-RET fare was twice the RET fare, the haulier would pay 50 per cent the increase in year 1, 75 per cent in year 2 and 87.5 per cent in year 3.
However, increases on some routes would still be significant. As of April this year, under the transitional scheme, the fare for a 17m vehicle on the Ullapool to Stornoway route would increase by £95.48 and on the Oban-Coll-Tiree route by £98.72.
Western Isles Council was not convinced. On 15 February, it unanimously passed the following resolution:
“The Comhairle is of the view that the current proposals by Scottish Government in regard to the withdrawal of RET for commercial vehicles will be detrimental to the economy and community of the Outer Hebrides;
The Comhairle requests that Scottish Government withdraw its proposals as regards the withdrawal of RET for commercial vehicles until the evaluation, referred to in the announcement by Transport Scotland on 13 February 2012, has been completed”.
Given that the motion was passed unanimously, I presume that the council’s half-dozen SNP councillors supported it or at any rate did not turn up to vote against it. After the motion was passed, the OHTG wrote to its MSP, Dr Allan, expressing its satisfaction at the council’s position and asking for his
“clear, and equally unambiguous support in conveying this message to Transport Minister Keith Brown.”
I understand that, on Tuesday, the group received a reply from Dr Allan, advising that he had made its views clear to the transport minister.
I also believe that the OHTG wrote directly to Mr Brown observing that
“the Comhairle requests that Scottish Government re-instate RET for commercial vehicles until the evaluation ... has been completed. It is unusual for a study and evaluation to take place during a time of transitional arrangements, and the Comhairle would suggest that it is in all parties’ interests—Scottish Government, the Comhairle, the Outer Hebrides community and commercial operators—that the study is allowed to evaluate the full operation of RET on the basis of objective evidence.”
Our motion seeks the same—that a moratorium is declared on the RET changes
“until a full and proper socioeconomic study has been carried out”.
As for the Government’s amendment, the OHTG says:
“It is riddled with nonsense”.
That is a bit cruel but I think that, as usual, it is self-congratulatory and complacent.
I move,
That the Parliament notes that the road equivalent tariff (RET) scheme has brought significant benefit to the Outer Hebrides, Coll and Tiree; is of the view that the current proposals to withdraw RET from larger commercial vehicles will be detrimental to the social and economic wellbeing of these islands and communities, and calls on the Scottish Government to enforce a moratorium on the fare increases until a full and proper socioeconomic study has been carried out to assess the impact that increased transportation costs will have on households, local employers and island hauliers.
10:31
We welcome this debate on what is, as I think Elaine Murray said, a vital issue for our island and rural communities. I am sure that everyone here recognises the significant benefits of the road equivalent tariff scheme, although I reiterate that it was opposed by the Labour Party—as Elaine Murray will discover when she checks the newspaper cuttings and previous comments from, in particular, Des McNulty.
Will the minister give way?
I want to get started—I will let the member in later on.
Elaine Murray should also look at the comments of a Labour candidate in 2011 who advocated scrapping the entire scheme and giving £400 to everyone in the Western Isles with a car. I have the transcript of the interview, and I am happy to give it to Elaine Murray afterwards. I am simply interested in knowing the Labour Party’s position on this matter. If Labour members wanted RET to be continued for hauliers in the Western Isles—and, I presume, the rest of Scotland—when did they make that representation in the budget process? For example, can they tell us how much they think such a measure would cost? I would be interested to know.
The minister asks about the representations that Labour made, but the Government was absolutely silent on the issue during the budget process. Indeed, the budget makes no mention of withdrawing RET from commercial vehicles.
The amount being spent on this was made clear in not only the budget, but John Swinney’s autumn statement. We also subsequently made it clear to hauliers what we were doing. Given that Labour was silent about proposals for additional expenditure on the issue, I do not think that we can treat with much seriousness any proposal that it comes forward with now that would massively increase expenditure. Moreover, the idea that the Labour Party put forward in 2011 of giving £400 to everyone with a car would have cost £70 million. Of course, that measure would not have touched hauliers at all.
The RET pilot has boosted car journeys by up to 31 per cent, hugely benefiting tourism and local businesses.
I very much welcome the minister’s commitment to undertaking a proper study of the economic situation of hauliers and other companies. Will he extend that study to fuel costs, particularly in light of recent evidence that the UK Government’s much-trumpeted 5p fuel duty cut might not apply to many hauliers that buy directly from suppliers rather than retailers?
I find it very interesting that, as seems to have emerged today, that particular rebate will not apply to hauliers. I wonder whether we will hear more about that in the debate.
With regard to increasing fuel costs, which Elaine Murray also referred to, the member should ask herself whether it is right for the Scottish Government to continue to pour money back into the Treasury as a result of the fuel duty escalator, the price of fuel and increases that the Treasury itself has caused.
Will the minister give way?
No. I have already taken an intervention from the member—and it was not a very good one.
The additional costs to CalMac alone—[Interruption.]
Order!
The additional petrol cost to CalMac alone is around £14 million. There have been cost increases, and there is no doubt that everyone is having to bear them. When I met the hauliers, I acknowledged the increasing cost of insurance and the fact that fuel prices were higher on the islands. Those are costs over which the Scottish Government has no control and RET was not designed to address them. It was meant to make the cost of travelling by car equivalent to the cost of travelling by ferry.
We made a commitment to continue RET on the current routes and we would be keen to hear what Labour has to say about our proposal that RET should be rolled out throughout the network, because it has not said much about that so far. We are looking to roll it out to the Argyll and Clyde islands, in light of the Western Isles pilot—it was a pilot—the aim of which was to find out the consequences of RET. As has been mentioned, the result was hugely successful from the point of view of individuals and in terms of increasing tourism. It was not as beneficial to individuals on the islands, as the reduced costs to hauliers were not fed through to customers.
We have gone beyond what was originally proposed. We recognise the real benefits that RET can bring and we believe that it is right that all ferry users in Scotland should benefit from the scheme, which is why we announced our intention to roll it out across the ferry network.
In the northern isles, we have said that it is our intention that in future the fare structure should relate to RET. That does not mean that everyone pays RET, but that the cost of travelling by car and by ferry should be equivalent. However, if we were to roll out RET to Shetland for example, that would in many cases result in an increase in costs, which is one reason why we have not done that there.
Although RET for larger commercial vehicles made up around 40 per cent of the cost of the scheme, evidence shows that only 7 per cent of hauliers and businesses were able to pass the full savings on to customers.
Does the minister not accept the contention that the reason that the savings could not be passed on in their entirety was because of things such as fuel costs? In fact, RET was helping to keep prices down, which is one of the arguments from businesses throughout the Western Isles.
I have already acknowledged some of the fixed costs that hauliers have to contend with and that increase the pressures on them. All that I would ask is whether it can be right that we continually feed moneys back to Westminster, which increases fuel duty, for example? We give that back by subsidising those costs. [Interruption.] The Labour Party has the opportunity to bring its position to the chamber and I would be interested to hear its views.
We have acknowledged from the outset that the removal of RET from commercial vehicles on the Western Isles, Coll and Tiree routes will have an impact, but those are the only routes in that position. That is why we have come up with the transitional scheme in which, despite what Elaine Murray says, there will be no increases of more than 50 per cent and most will be substantially less than that.
As with many issues, especially in relation to rail, which we discussed earlier, the Labour Party has talked about commitments. Over the years, it had a chance to do this and it did not. This SNP Government has brought RET forward, often in the face of opposition from the Labour Party.
It would be interesting to hear the Labour Party’s position. Does it now support RET? Does it support RET for individuals or for hauliers? Or is its idea, as one of its candidates said in 2011, to give a £400 cheque to every car user in the islands? There was no mention of hauliers.
Will the minister give way?
The member has had a chance, and Labour will get another one when it sums up to say whether that is its position.
Our clear objective since announcing the roll-out of RET has been to listen to, to discuss and, where we can, to agree with hauliers and businesses on a more flexible approach that will reduce the impact. Hauliers have queries about the Halcrow study, which Elaine Murray mentioned. We said that we will have a further study on that. They have also said that they want the study to be much more broadly based so that it takes into account the economic impact on the entire islands. We have said that we will do that. We will work with them on the remit for that.
We have also extended eligibility for RET to vehicles up to 6m in length. That was not the case previously, and it is a huge benefit to people—
Will the minister take an intervention?
I am sorry, but I still have a fair bit to go and I have already taken two or three interventions.
We want to alleviate the impact of removing RET from hauliers who previously benefited from it. We have announced plans to extend RET—people who were not getting it before are getting it now. That will ensure that smaller commercial vehicles of up to 6m will benefit from RET from spring 2012. There are real benefits to people.
We are also trying to make the scheme more equivalent. In the past, the discount scheme benefited larger hauliers at the expense of smaller ones. We are trying to ensure that that does not happen in future and we are working with the haulage industry to make the scheme worth while.
As has been mentioned, we had a useful and constructive meeting with key hauliers and stakeholders, which has allowed us to discuss further ways to reduce the impact on hauliers and businesses. Following that meeting, I announced the new transitional rebate scheme. That involves additional funding. It would be interesting to see whether other parties support that additional funding or want to go further, despite the fact they were silent on the matter during the debate.
I move amendment S4M-02087.2, to leave out from “is of the view” to end and insert:
“welcomes the decision to roll RET out to other Clyde and Hebrides routes, including the Sound of Harris and the Sound of Barra; welcomes the investment of £5.3 million next year on the routes to Western Isles, Coll and Tiree; welcomes the increase in journeys to those islands of 30% that has resulted from the RET pilot, particularly in tourist journeys, notes that RET for large commercial vehicles made up around 40% of the cost of RET and that evidence from the pilot study showed that only 7% of hauliers passed the full benefits on to consumers; notes that, following discussions between the Scottish Government and local companies, investment of £2.5 million in a transitional scheme will support all hauliers regardless of the size of their business; welcomes the inclusion of vans of up to six metres in the RET scheme and the Scottish Government’s commitment to a six month study of the costs faced by island hauliers, including fuel duty and insurance costs, and the impact on the local economies and households of the Western Isles, Coll and Tiree, and looks forward to the review of ferry services that will put RET at the heart of an equitable system of fare setting.”
10:39
I support Elaine Murray’s motion, which is sensible and constructive, and I cannot for the life of me see why the minister is against it. When a minister has to start by spending three or four minutes attacking the Opposition, we know that his argument is not particularly good to begin with. Actually, the Scottish Government has a perfectly good story to tell on investing in the islands, so I would have preferred it if the minister had spent time doing that rather than attacking everyone else for reflecting the serious concerns of hauliers and other people in the islands about the current schemes. Those concerns are not just in the islands that Elaine Murray rightly mentioned, but in others as well.
As the minister rightly said, the schemes are important because they are about investments in the islands and in the economies of those diverse parts of Scotland. That is what the Government should concentrate on. I appreciate that this is a Parliament and that, therefore, all the politics have to happen, but Elaine Murray set out some pretty reasonable facts and figures behind her arguments. The minister should have responded to those, rather than talk about things that happened in 2007—believe me, we could all do that.
My amendment simply asks for the constructive approach that is suggested in the Labour motion to be extended to include other ferry routes, because of the further shipping problems that impact on island communities. I am absolutely not clear about what the minister said but, if I got him right, he might have talked about another study that might look into all those issues. If he set out the proposal in detail in his winding-up speech, rather than just attack everyone else, we would all be genuinely grateful.
It is important to recognise the reality of the policy in relation to the Western Isles. Before 2007, volume hauliers from those islands received a 25 per cent discount to travel to and from the Hebrides. That was Government policy. The new Government added 15 per cent to that discount and called the entire package the road equivalent tariff. That is the reality of what happened. I welcome the fact that the new Government did that, as it was a good thing to do as a further investment in the economies of those islands. Frankly, however, the measure had little to do with road equivalence. The extra 15 per cent helped local hauliers and the wider economy, as the Scottish Government’s recently published ferries review paper makes clear, but that Government support was not dissimilar to the support for islands from the previous Government in which Elaine Murray and I served, which also supported shipping services on which the islands depend.
Will the member take an intervention?
No—I want to make progress.
The nationalists have moved the policy forward, which is good, despite the fact that they ran the longest trial in political history, between the 2007 and 2011 elections. I see that Mr Neil is gracious enough to smile about that—he was probably responsible for it. I am genuinely puzzled as to why the problems that have emerged were not spotted in that longest possible trial for which Mr Neil’s Government was responsible. That is one issue that could have been dealt with.
Will the member take an intervention?
I want to finish a couple of points.
I do not normally get telephone calls and representations from people in other constituencies about shipping, although I get plenty from my own, but a Lewis haulier, David Wood, has been in touch with my office overnight. He says that the new prices that he has been quoted are the pre-2007 prices plus 50 per cent. In specific cases, he thinks that his freight bill will rise by 60 per cent. That is why the motion and my amendment are necessary.
I appreciate that the minister is in a difficult bind. He would be well advised to accept the fact that his officials do not know the answers to all the issues and, frankly, neither do we. That is why Elaine Murray is correct to call for a full socioeconomic study. Local hauliers as well as the Western Isles Council—as I invariably do, I met the convener and vice convener of that council at Edinburgh airport the other day, waiting for planes to our respective islands—make exactly the same point, as has the Outer Hebrides transport group, which Elaine Murray mentioned.
I genuinely do not know what the minister has to fear from the kind of study that is being asked for. It would help evidence-based Government decision making and would therefore be a credible and sensible way in which to proceed. When I was the minister, I used to be constantly advised, “If you’re in a policy hole, stop digging.” To me, this looks like a policy hole. The Government and the ministers would be well advised to find a sensible and constructive way forward on which we can strongly agree.
The minister mentioned the £2.5 million transition fund that he announced last Monday and he said that it had been properly assessed. Liam McArthur and I, like everyone in Orkney and Shetland, know that he did not ask the Western Isles to contribute to the fund. I agree with that and I think that he was right not to ask the Western Isles to contribute. However, what is good policy for the goose is certainly good policy for the gander. Shetland’s ferry services have been further disrupted this week. That was an entirely predictable disruption that was caused by weather and operational factors.
You must close now.
Last night I asked the minister to meet the local industry and the council to find an immediate solution, and I reiterate that request today.
The Government needs to understand the impact of its changes to RET in the Hebrides and in the wider context, for example in Orkney.
Close and move your amendment, please, Mr Scott.
I am just finishing this point, Mr Scott.
The debate is an opportunity for the minister to be constructive and to listen to local representations. I urge him to do so.
Could you move your amendment, please?
I am happy to do so.
I move amendment S4M-02087.1, to insert at end:
“and that such a moratorium should apply to all fares on all island routes under the responsibility of Scottish Government tenders to allow a full and independent assessment about how RET or an appropriate fare reduction mechanism can be rolled out on an equitable basis to the benefit of all Scotland’s islands.”
10:45
We thank the Labour Party for bringing the issue for debate and I thank Dr Elaine Murray for her constructive contribution; unfortunately, the same cannot be said of the minister’s speech.
In July 2011, the Scottish Government’s evaluation of the RET pilot stated:
“the Western Isles have been historically characterised by higher levels of declining population and poorer economic performance in comparison to other parts of Scotland ... and also Scotland as a whole.”
For that reason, routes serving the Western Isles were identified as the pilot routes. Clear reasons were given for choosing the Western Isles for the pilot, but there is now a distinct lack of clarity on why RET for commercial vehicles has suddenly been withdrawn.
During the pilot, fares for commercial vehicles and passengers fell by up to 54 per cent, and RET helped to increase passenger traffic by more than 17 per cent in the first two years. As Elaine Murray said, an additional 30,000 tourism visits were made in each year of the pilot, and three quarters of tourism providers indicated that they had increased levels of occupancy, higher demand and a longer season.
Will the member take an intervention?
No, I am very short of time. I will think about taking one if I get through what I want to say.
The RET pilot allowed small firms to compete more effectively in mainland markets and to increase exports from the Western Isles. The initial response of business to an increase in trade was to make better use of existing staff, who might have been underemployed, but, understandably, long-term investment was deferred until there was certainty that lower fares would be permanent. Retail employment in the Western Isles increased during the pilot period.
All the increases in tourism and so on to which the member refers were a result of RETs for passengers and cars; the additional visitors did not arrive by lorry. Today we are talking about the RET for haulage vehicles; RET for cars and passengers remains as a permanent feature of services to the Western Isles.
We cannot take out the socioeconomic impact that the large-scale hauliers have in the Western Isles. All the figures that I have given are factual economic statistics. It is not possible to separate out the effect of RET on large hauliers.
Paragraph 11.7.7 of the Government’s evaluation report of July 2011 says:
“The predominant perception of both residents and businesses was that RET has been beneficial to island businesses and ... island communities as a whole.”
Against that background, it is difficult to understand the response of Keith Brown, when he was questioned by the Infrastructure and Capital Investment Committee, that the subsidy that was paid to hauliers was not passed on to businesses or consumers in 90 per cent of cases. That contrasts with the view of hauliers, whose spokesman said:
“With RET we revised our prices and reduced costs to customers, we will now have to look again at our cost base, ultimately our customers will have to pay.”
The SNP Government blames the hauliers for not passing the benefits of reduced ferry costs on to customers and it plans to punish them with increased charges, which, ultimately, people in the Western Isles will have to pay for.
Transport Scotland has stated that the minister was pleased that the Western Isles community clearly understood the budgetary pressures that the Government faced. The question is whether the SNP Government understands the budgetary pressures that the community faces. It is not surprising that Western Isles Council holds the unanimous view that the withdrawal of RET for commercial vehicles will be detrimental to the economy and the community of the Outer Hebrides.
Will the member give way?
No, I have less than a minute left.
I appreciate that RET was a pilot and that it has been evaluated, but I cannot understand why the Scottish Government is withdrawing it for commercial vehicles without giving the Western Isles community any idea of what will be put in its place, except that the rise in cost will not be any more than 50 per cent. The socioeconomic need that was identified at the onset of the pilot still exists, but no economic assessment of the withdrawal of RET has been carried out. [Interruption.] I must finish now to stay within my time.
I hope that the SNP Government will act swiftly, will respect islanders, and will ensure that ferry fares are applied consistently and with certainty for the future of the economy on the back of a detailed social and economic assessment.
10:50
I lived for 10 years on the Isle of Lewis and I travelled extensively to and from and up and down the Western Isles from the Butt of Lewis to Barra and Vatersay. In my time in the islands, from 1973 to 1983, I remember the Lewis branch of the SNP proposing an RET at SNP conferences, and the party adopting it as our policy. I do not remember the Labour Party making any attempt to introduce an RET, although it had many opportunities to do so. Nor do I remember the Labour Party and the Lib Dems making any attempt to introduce an RET when they were in power in the Parliament from 1999 to 2007.
Indeed, when the SNP Government proposed an RET, Labour’s Des McNulty said that the RET plans were
“unfair, discriminatory and politically motivated.”—[Official Report, 10 September 2008; c 10624.]
Earlier, the then Lib Dem transport minister, Nicol Stephen, said:
“It is far from certain that road-equivalent tariffs would benefit communities such as those in the Western Isles, because the longer ferry routes could well be more expensive as a result”.—[Official Report, 6 May 2004; c 8174.]
So much for Labour and Lib Dem support for RET. Between them, Labour and the Lib Dems did everything that they could to prevent RET from being introduced and now they cry crocodile tears over a system that they never wanted in the first place.
Since the SNP Government introduced RET in 2007, it has proved to be a fantastic success story for Scotland and our island communities. For locals and visitors alike, RET has narrowed the straits between islands and the mainland by lowering the costs of ferry travel.
The figures in the RET final evaluation report tell part of the story. Passenger travel increased by 20 per cent and the number of cars using the ferries rocketed by 31 per cent. We need only to chat to a Leodhasach to see that the success of RET is more than a statistic. It has made life in the islands easier and better. Room occupancy has increased by 24 per cent and there is evidence that the tourism season has been extended. The number of tourism businesses has increased by 10 per cent.
Because of that, in November 2011, I was delighted to hear that the Scottish Government intended to continue with RET in keeping with our manifesto pledge. We will also extend RET to routes all along the west coast of Scotland. It will apply to cars, passengers, vans and other vehicles under 6m in a time of severe budget constraint. That shows a commitment to our smaller, more rural communities that can often slip off the United Kingdom Government’s radar. For commercial vehicles, however, the Government is replacing RET with a new transitional relief scheme that is worth £2.5 million. Keith Brown, the transport minister, has met transport groups and said that he will keep the situation under review.
The Government has promised to preserve RET as a permanent feature of ferry travel to the Western Isles, Coll and Tiree. Its ambitious plan is to extend RET to Harris, Barra, Colonsay, Islay, Gigha, and then to Arran. Following that, it will cover Raasay, Mallaig, Armadale, Kilchoan, Lochaline and the Small Isles, all of which are in my constituency. That will help to secure and develop all those routes and is very welcome. The ferries review is being undertaken at the moment and I have had positive responses from the minister in relation to that.
Could you conclude, please?
Labour and the Lib Dems can cry all the crocodile tears that they like, but nothing will change the fact that it was an SNP Government that introduced RET to Scotland’s islands and that only an SNP Government will deliver for the whole of Scotland.
Speeches are of a tight four minutes. I call Rhoda Grant, to be followed by Jean Urquhart.
10:54
I rise to support the Labour Party’s motion on the removal of RET for commercial vehicles. The policy would be ludicrous during a time of economic stability, but to increase fares by up to 134 per cent at a time of economic downturn is rank stupidity.
The SNP Government has a duty to protect and provide for the people whom it serves, but it is not doing that. Because of the public outcry, it has sought to introduce transitional arrangements that will see no fare rise beyond 50 per cent this year, but a 50 per cent rise this year is indefensible.
The Government hopes to divide and rule. It has extended RET to small commercial vehicles of up to 6m, which it should have done years ago. It was cheaper to take a camper van over to the islands than a small commercial vehicle of the same size. The Government has also continued RET for passengers and tourism traffic, again trying to introduce some division.
The Government has sought to accuse hauliers of not passing RET savings on to islanders, again seeking to cause division. I do not want to waste a lot of time on that, but it shows that the SNP Government is trying to drive wedges and create divisions between communities in an attempt to divert attention from its policies. The claim is refuted by all; every haulier to whom I have spoken is more than willing to open their books to the Government so that it can examine them and see that the claim is untrue. If hauliers in the islands were profiteering, they would not be going out of business.
Divide and rule—that is the SNP Government’s hope. What it fails to understand, but what every islander understands, is that the cost will be borne by all the islanders. Nothing can go on or off the islands without the islanders bearing the cost. The policy means that prices will go up in shops, hotels and restaurants. The costs will be borne by the health service and local government as well as by ordinary families.
Divide and rule has not worked, so the SNP Government is trying something else, and it is its usual stance—blaming someone else. We heard Alasdair Allan, in his intervention, trying to make out that hauliers and indeed the Labour Party are looking for lower fares in order to offset fuel prices that are increased elsewhere. We are not asking for lower fares. Nobody is asking for that. We are asking only for RET to continue until the impact can be fully assessed. That claim is something else that the SNP has put into the debate in order to blame someone else and create a diversion from its policies.
The SNP says that the Labour Party never supported RET, but it was in our manifesto to roll out RET to the Argyll islands. That was Labour Party policy, and it was fully costed at that point. The SNP, in a fit of terror, decided to copy us, but it did not cost the policy, so it is stealing from Peter to pay Paul, robbing the Western Isles in order to pay for the roll-out of RET to the Argyll islands. However, those islands are waiting, and some of them will wait for close to five years to get the benefit of RET.
I turn briefly to the Liberal amendment.
It will have to be very brief, because you need to come to a conclusion.
The Liberal amendment points out that RET on some of the northern isles routes would lead to fare increases. That is hidden gently within the ferries review, under which RET to the northern isles would be phased in. No islander will pay lower prices; in fact, they will face higher prices.
The SNP is breaking another promise as it seeks to rob the most vulnerable in our society.
10:58
I begin by coming straight back to Rhoda Grant and reminding her of the wording in her party’s manifesto as recently as 2007. There is no mention of RET. The manifesto states:
“We will create a new scheme to give 40% reductions in the cost of ferry travel for foot passengers”—
that is not RET—
“with further discount arrangements”—
they are not mentioned, not declared and not specified—
“for cars and freight.”
Will the member take an intervention?
That does not amount to RET.
On a point of order, Presiding Officer.
I am afraid that I have to ask you to stop for a moment, Ms Urquhart, because there is a point of order.
Presiding Officer, is it not normal courtesy, when a member has referred to another member by name, for them to take an intervention from that member?
It is entirely for the member who is speaking to decide whether to take interventions.
Thank you, Presiding Officer.
Rhoda Grant said that we have not given the approach long enough, but Tavish Scott talked about a four-year trial.
There is a great deal of confusion about what helps economic development. I am not here to defend the taking away of something. The SNP Government was right to introduce RET. I live near the mainland ferry terminal for the Stornoway to Ullapool ferry and I remember that for 30 years people would tell me, “We’d love to go to the Western Isles, but we’ve just looked at the tariffs and can’t possibly contemplate taking our car over.” I know for a fact that that happened every day, so over many years the tariffs must have prevented hundreds of thousands of people from travelling. The industry was seriously restricted because of the cost of ferry travel.
I think that just about every member who has spoken has talked about how the statistics show the success of RET. It has been particularly successful in encouraging people to take their cars on the ferry; car travel has increased—not haulage. That tells us something about how we should approach the business.
We face a 32 per cent cut in the budget—I hear everyone groan—and everyone has to take part of that cut. We simply cannot wait. This year we will have to contract for new ferries to be built, and the measures in the amendment in the minister’s name will have to be paid for. I do not like having to take something away; nobody does, and I am sure that the minister does not want to do it. However, we must consider the evidence that has been gathered.
Let everyone be assured that we always consider economic development throughout Scotland. We know that that is the most important thing to do. Ferry fares are a significant issue in that regard and affect not just hauliers but everyone, but there is evidence that one part of RET has been hugely successful and the other less so, so it is not rocket science to work out where we might continue to offer support.
When RET was introduced our opponents in the Parliament had plenty to say. There was talk of a cynical political bribe—
You must come to a conclusion.
It was not cynical, and what we are doing is evidence of that. It was easy then to make such comments—it was just another day in the quagmire of Scottish politics, with one-upmanship at its worst. However, today we face a serious matter. The Government will continue to promote economic development in the Western Isles, despite the problems and the cuts that mean that we have had to take the decision that we have taken. I support the amendment in the minister’s name.
11:03
I am pleased to be able to speak in this debate, because I have lived on an island for more than 30 years, so I have an appreciation of ferries that is sometimes lost on mainlanders. The ferry that serves the small island on which I live is an overgrown rowing boat, which has an engine that works most of the time. In the old days, the ferryman used to row the boat, but nowadays he is a wee bit smarter; if the boat has to be rowed he makes the passengers row it. I come from a long line of ferrymen and mariners, so I have a special interest in ferries and in islands.
Thinking about the debate brought back memories of when I first heard the term RET, from a relative who worked for CalMac long ago. He was an islander too, and I remember him being quite excited about RET. I was in my early teens at the time—I am talking about quite a long time ago—and as the years and decades passed, hope of RET being introduced faded and many of us thought that that wonderful concept, which would level the playing field between the islands and the mainland, would never be realised.
I am therefore proud that in the previous session of Parliament the SNP Government introduced the RET pilot for the Western Isles and the Argyll islands of Tiree and Coll, with a promise that if the pilot was successful the Government hoped to roll out RET to other islands. Predictably, the Opposition parties—in particular the Labour Party and the Lib Dems—offered nothing but criticism. I can almost forgive them for that, as it is perhaps what they feel they ought to do, but what I find really hard to forgive is that they busied themselves with blowing on small embers of discontent in the hope of fanning them into a bonfire, and followed an agenda of the most naked political opportunism.
Fortunately, many islanders of good sense were prepared to wait and to place their trust in the SNP in the hope and expectation that we would deliver RET for other islands, given time. I am therefore delighted that there is now a commitment to roll out the scheme to many of the other islands, and that we have repaid that trust.
Unfortunately, we are yet again hindered in our efforts to improve ferry services by the Westminster Government, which is imposing quite draconian cuts to the Scottish budget. RET requires more capacity on some routes and it requires new boats. That is a tall order indeed, when capital budgets are being cut by 32 per cent. It is a tall order when revenue budgets are being cut and it is an especially tall order when much of the existing CalMac fleet is getting to be past its sell-by date.
Neither RET nor the ferries review offers the perfect solution to our islands’ needs but, in terms of improving ferries, the SNP Government has already, in a few short years, achieved an awful lot—much more than any of the previous Governments in this Parliament, or those in Westminster for a generation and more.
Predictably—again—the Opposition parties will carp and criticise, but the suggestion that we can do much more in these difficult times is the kind of fantasy politics that will fool not many people, far less Scotland’s islanders, who are known for their pragmatism and common sense.
11:07
Four cold winters ago, I was sitting in a draughty room in the Corran halls in Oban, taking evidence on the future of ferries with other members of the then Transport, Infrastructure and Climate Change Committee. I see that Rob Gibson, who was with me at the time, is also here today. The hall was packed, and everyone had something to say about ferry services. Commuters were worried about buses leaving as the CalMac ferry steamed in to Oban pier, hauliers were worried about the costs and capacity of ferries, and there was general concern about timetabling, availability, frequency and types of vessels.
That meeting followed an overnight NorthLink ferry from Aberdeen to Orkney and Shetland, a videoconference with business and council leaders in the Western Isles and a conference with the CalMac and Western Ferries boards. That all led to a comprehensive report, which was, in fairness, fully accepted bar one point by the then Minister for Transport, Infrastructure and Climate Change, Stewart Stevenson. More recently, in autumn last year, I attended a massive public meeting in Dunoon, along with Mike Russell, at which there were more than 500 people campaigning on concerns about the Gourock to Dunoon ferry service.
There are many lessons to be learned from all that. Ferry services are not just another mode of transport; they play a crucial role in stimulating economic development, attracting inward investment, sustaining indigenous jobs and providing lifeline services. In short, they are a key and vital driver in rural development, which is why I welcome the debate and the opportunity to raise the concerns of hauliers, local residents and the Western Isles Council.
First, however, there is the obvious question: what is RET? As we all know, it has, in its pure form, been around for a while. I note—as the minister may do—that at least one SNP Highland councillor claims to have invented the principle of RET. Perhaps it is like the old concept from our school days: in history lessons we were asked about the Schleswig-Holstein question and told that only two people understand it, and one is mad and the other has forgotten it.
I understand that RET in its pure form works extremely well in Canada, particularly in Newfoundland, but the Scottish Parliament information centre tells me that the key issue is road equivalence. Taking the example of the Stornoway to Ullapool route, one would measure the distance on the sea route, work out the cost of driving that distance, and use published tables from the Automobile Association and the RAC to come up with the ferry fare. One could do exactly the same with commercial transport.
How, then, can the Scottish Government justify the crippling fare increase for hauliers? The admirable Outer Hebrides transport group, which has—quite rightly—been mentioned several times today, quoted to me an increase of 172 per cent on the Uig to Lochmaddy route before the 50 per cent cap was brought in. Have fuel costs increased by 172 per cent, or have Uig and Lochmaddy all of a sudden moved closer together? I am not sure whether even the resourceful Alex Neil could manage that great feat of geology. That is how RET works. Why does the minister not admit that we do not have a pure RET system, but a system of fare-subsidy control masquerading as a principle of transport economics?
Do not take my word for it; I am sure the minister will not. David Wood, the owner of Woody’s Express Parcels, who has been mentioned already, said:
“The rationale for the government plan to withdraw RET for commercial vehicles is based on a false prospectus ... The claim that haulage companies haven’t passed on the benefits to customers is a falsehood and must be challenged robustly”.
Finally, there are some key questions that I would like the minister to answer in his wind-up. Does the Scottish Government still support the principle of there being a ferries regulator? If so, when will the regulator be in post, and does the minister think that an independent regulator would allow the crippling fare increases for commercial traffic?
11:11
I want to concentrate on two aspects of the debate, because it is important to understand some of the background and the emphases that are needed.
First, let us look at the costs for hauliers. It has been mentioned that VAT on fuel, vehicle maintenance and saving up for new vehicles are all part of the costs of providing a haulage service. That is the situation everywhere, but here it is exacerbated by the fact that VAT on fuel is outwith the control of this Parliament. Because of the severe budget constraints, the hauliers have to face that charge and it has to be included in their total costs. If we are to come to any clear conclusions, the six-month study of the costs facing the island hauliers that are suggested in Keith Brown’s amendment will need to take such things into account. This is a socioeconomic inquiry as well, and the Labour Party’s motion should therefore recognise that several routes can be taken in it. The point is that the ferries review must also take into account the socioeconomic conditions of the places that are served. The Government is undertaking the process of socioeconomic comparisons, and I believe that if we support the Government amendment we will achieve the ends that are stated in that part of the Labour Party’s motion.
We are asking in our motion for a moratorium on the changes to RET, until that socioeconomic study is completed.
Labour failed to attempt to get the money for that from the budget, so Elaine Murray is coming at the matter at the wrong time. She is deluding people on the islands into thinking that they could have such a moratorium now when she did not bother to get on her feet and argue for it then.
Rhoda Grant rose—
No, thank you.
We have to consider things with a wider perspective. I have looked at work we did in the Rural Affairs, Climate Change and Environment Committee, which recognised that in countries such as Finland, people—wherever they live—have a right of equal access to services. If we were starting from scratch in an independent Scotland, it would be possible to recognise that people have a right to live in the Western Isles, the northern isles and the northern Highlands and to make transport policies to fit that. The Finnish Government decided in 2010 that everyone would have a basic right to broadband within three years. If we could adopt that approach, we could cut out the arguments about whether one thing or another was controlled from London or here.
Fundamentally, there are attempts to score political points in this debate, by suggesting that we are trying to divide and rule, when the SNP has finally delivered a form of road equivalent tariff that allows many communities to benefit at a time of huge budgetary constraint. In this debate, the Labour Party has not recognised the strength of the Government’s commitment to the socioeconomic inquiry—it is not called that—or that a cost moratorium is not possible in this round.
We come to closing speeches. I remind members who have participated in the debate that they should be in the chamber for closing speeches.
11:15
I suspect that Dr Allan’s constituents and mine are not too bothered about the mechanism; they are bothered about fare levels, which are the heart of the matter for any of us who care about ensuring that we invest properly in lifeline ferry services and that the islands have a viable economic future. I, therefore, become a little puzzled when I hear from the nationalists all the criticisms of other parties that have proposed different ways of dealing with fare levels. I am sure that Mr Brown has the same overall objective as I have, which is to tackle fares and keep them moderate in the context of the financial challenges that any Government would be facing. That is what I think he is driving at in his ferries review.
Mr Brown—I am sorry; it was Mr Stevenson, his predecessor—chose to introduce the pilot on the road equivalent tariff. It was perfectly fair to do that, because RET is a mechanism to tackle fare levels, but to attack everyone else who had a different idea about how to achieve the same policy objective is barking politics. Maybe that is the Scotland that we are now in.
Will the member take an intervention?
No. I am dealing with the fares point.
Mr MacKenzie omitted to mention in his speech the fact that most of us across the chamber believe very strongly in investing in the islands and in finding the right way to do that; it is not about just RET. As David Stewart rightly observed, RET is but one mechanism. It works beautifully in some parts of the country, as the minister rightly reflected, but it does not work in all parts of Scotland—never mind in all parts of the world. There is no such thing as a “pure RET”, so instead of having an obsession with one three-letter word, let us concentrate on finding the correct way to deliver the fares structure as—whatever Government is in power—we must.
Tavish Scott mentioned that there are other ways of tackling the issue. I think that one of his party’s preferred approaches is through the 5p fuel derogation scheme. Can he confirm that that would not apply to the very hauliers he professes to be concerned about? Will that change?
Mr Brown used the phrase “professes to be concerned about”, so is it his contention that I do not care about the hauliers? The partisan nature of the way in which Keith Brown behaves says it all.
Let me deal with the point. [Interruption.] Mr Brown should listen. The fact is that the Chief Secretary to the Treasury is dealing with the issue. That is on the record and it is what is happening. Instead of attacking the UK Government, maybe Mr Brown should stand up and praise the fact that every constituent in my constituency and in Mr Allan’s constituency will get a 5p discount on their fuel. He should applaud that instead of attacking it.
What about the hauliers?
The hauliers point is being dealt with by the Chief Secretary to the Treasury. Mr Brown nods and shakes his head—that says it all, for me. Let us find a diversion, let us blame London and let us do everything else. Mr Gibson had the gall to talk about London. This policy is the Scottish Government’s; it is its alone, so it should deal with it and stop blaming someone else all the time.
I will make one other point about investment in the islands’ future. When I was Minister for Transport and Telecommunications, we introduced an air discount scheme for all the islands. It was not based on how the people there had voted. When this Government realises that the economic future of our islands is based on those islands being there, not on how they vote, it will have a transport policy worth supporting.
11:18
I am pleased to close the debate for the Scottish Conservatives. I welcome the fact that Labour chose to debate the issue.
As we have heard from members, including my friend Mary Scanlon and Rhoda Grant, the removal of larger commercial vehicles from the RET scheme is causing real concern in the Western Isles and on Coll and Tiree, with their fragile economies and their reliance on hauliers to supply the goods that they need.
Like other Highlands members, I have been contacted by numerous concerned constituents on this matter and I first made representations to the Minister for Housing and Transport back in early December. I have since written to the minister a second and, indeed, a third time on behalf of the cross-party group on crofting about crofters’ concerns about rises in the cost of transporting stock and feedstuffs. I have also lodged a series of written questions.
I accept that, thanks to the powerful and effective lobbying of many of my constituents, including the Outer Hebrides transport group, which represents more than 70 businesses, the Scottish Government has moved its position to some extent. The rises that hauliers initially faced of up to an eye-watering 175 per cent compared with current RET prices will now—thanks to some extra funding for transitional arrangements—be pegged at a still hugely alarming 50 per cent. Ministers still need to explain why they believed that the first enormous rises of up to 175 per cent were ever going to be acceptable to hauliers or consumers or, indeed, why they believed that they would be sustainable to local economies that have been so affected by the price of haulage. Why did they not anticipate the worry and anger that their plans would cause and take immediate action to prevent that? They need to do more to address the continuing concerns about rises of up to 50 per cent. Many of my constituents are frightened that those rises will be passed on to them.
As Mary Scanlon rightly said, hauliers are clear that they have been able to reduce costs to customers because of their inclusion in RET. Correspondingly, they are now faced with little alternative but to pass on the costs of increased charges to consumers. Scottish hauliers who make journeys all their lives to Scottish islanders for profits that are not enormous will be gravely insulted by the Scottish Government’s insinuation that they are not passing on the benefits.
The Freight Transport Association has warned that the proposals will add
“serious inflationary pressure to communities, damaging their economic well-being and threatening the tourism on which they depend.”
As we have heard, in its preliminary analysis of the proposals, Western Isles Council suggested that there would be a loss of around 100 full-time equivalent jobs. That is a massive number in the Western Isles.
I am sure that the member welcomes, as I do, the extension of the length limit, to include transit vans, for example, so that the absurd practice of local carriers having to have the length of vans chopped down will finally come to an end after years.
I know quite a lot of hauliers personally, and they are not happy. They are certainly not happy about the Government’s insinuation that they are not passing on benefits when, in some cases, they are not making much profit anyway.
In conclusion, as my friend Mary Scanlon said and Western Isles Council argues, the Scottish Government was correct in deciding to conduct a socioeconomic impact study of ferry fares policy, but that should be concluded before hauliers are faced with fare rises that have the potential to be seriously damaging to the economies of the Western Isles, Coll and Tiree.
11:23
I think that members universally agree on the importance of the island communities to the economy and wider society of Scotland, and I hope that everybody agrees that we should try to do our best not only for the Western Isles, but for all our island communities.
I hear what Tavish Scott says about the particular situation in the northern isles. As he knows, there is a heavy subsidy for the ferry service to the northern isles, and that subsidy will be continued, as we believe that it is essential.
In talking about ferry services, we are talking not only about increasing tourism, improving standards of living and all the other good things that we are trying to achieve, but, in many cases, about lifeline services. Therefore, we are very committed to the ferry service in Scotland. Indeed, the central theme of the ferries review and the consultation is the need to improve the ferry service—both the number of services to the islands and the quality and the number of ferries that are available. We start from that basis.
RET was introduced in the Western Isles for the reasons that Mary Scanlon outlined. There were very high levels of unemployment, deprivation and poverty there. As a result of policies that have been pursued by London in recent years, other areas have suffered, producing equally difficult statistics on unemployment and deprivation. That is one of the reasons—although not by any means the only reason—why we have already announced our intention to roll out RET for cars and passengers to all the island communities down the west coast of Scotland. I hear what Tavish Scott says about the need to address some of the issues in the northern isles, and I am happy to meet him to discuss them, as is Keith Brown.
I want to nail two myths that have arisen during the debate. First, Rhoda Grant said that some hauliers are facing an increase of 134 per cent in fares. That is simply not true. There is an onus on all members not to exaggerate and create hysteria, bringing about a situation in which people are informed, wrongly, of increases that are far in excess of what is actually happening. Secondly, a lot has been made of the hauliers not agreeing with the Scottish Government when we say that the benefits to the hauliers of RET were not passed on. It is not the Scottish Government that says that; it is the hauliers. Elaine Murray should listen to this and she will be educated. The independent research that was carried out as part of the evaluation of RET—an independent evaluation not by the Scottish Government but by an independent company—involved a detailed survey of 160 hauliers in the Western Isles. It was the hauliers who told us that only 7 per cent were passing on the benefits to the end users in the Western Isles. I accept that, now, the hauliers say that that is not true. However, members can believe me when I say that the information came, in the first place, from the hauliers themselves. That is in a public document, which members can check.
Will the member give way?
I will, in a minute.
We accept that the hauliers say that that is not the case. That is why the minister has already agreed, with the hauliers, to a study to examine the situation and to evaluate the impact on the Western Isles economy of RET for hauliers. That is also why we have introduced a transitional arrangement. At the end of the transitional arrangement, we will review the position in the light of the results of the study, which we will carry out with the hauliers. That is a reasonable position for us to take.
Will the cabinet secretary put the review in place before it increases the charges?
We have already announced the transitional arrangements, and I see no reason at the moment to change them.
I remind members of the situation that we inherited five years ago. There was a rebate scheme for hauliers in the Western Isles—only in the Western Isles, not on any other island, although some islands could have claimed that they should benefit from it as well. The total value of the subsidy to the Western Isles through the rebate scheme under the previous Executive was £500,000. With this transitional arrangement, we are giving a subsidy of £2.5 million to the hauliers in the Western Isles, which is five times the level of subsidy that we inherited five years ago.
Will the minister give way?
I will, in a minute.
The independent survey that I mentioned said that, according to the hauliers, ferry fares to the Western Isles accounted for, on average, less than 10 per cent of their total operating costs. Therefore, if the fare is increased by 50 per cent, that represents an overall increase in their operating costs of 4 to 5 per cent. Compare that with the 60 per cent increase in fuel duty that Gordon Brown—Prime Minister and Chancellor of the Exchequer—implemented, and the damage that it has done to the economy, the ferry service and the hauliers in the Western Isles. Compare it also with the increase in VAT in the very first budget of the coalition Government in London, which took VAT from 17.5 to 20 per cent. The VAT increase is on all the goods and services that Mary Scanlon referred to, as well as on the hauliers. VAT is calculated such that, when hauliers pay VAT on their diesel fuel, they pay it also on the fuel duty. Therefore, fuel duty was put up by 60 per cent, then VAT went up by one seventh, from 17.5 to 20 per cent, and then there was VAT on the higher fuel duty on top of that. The Opposition then has the cheek to accuse us of not looking after the Western Isles. We have done far more for the Western Isles than that shower put together.
Will the cabinet secretary give way?
He is concluding.
The reality is that if we had not had an SNP Government, there would have been no RET in the Western Isles: Labour and the Tories opposed it. We are not only maintaining it permanently in the Western Isles and extending it to the sounds of Barra and Harris, but extending it to all the islands on the west coast. It is high time that the Opposition parties woke up and smelled the coffee and realised that it is only this Government that has delivered on RET.
11:31
I do not think that the myths and misrepresentation that characterised the cabinet secretary’s speech do justice to this very important debate about the future of our island communities.
Not true.
If the cabinet secretary would stop shouting, it would help.
The chamber should surely be as one in its desire to ensure that our island communities and their economies and families receive the support that they need—the cabinet secretary himself said that in his speech. Travel has to be affordable for cars, passengers and tourists and for those transporting goods and products to and from our islands. However, following the outpouring of fury and indignation in the communities affected, we are now having a debate in Parliament on the impact of withdrawing RET for commercial vehicles, which Rhoda Grant highlighted in her speech. Tavish Scott was right to highlight the fact that a number of the affected island communities would be happy to support his amendment.
The Labour Party has a long and proud record of supporting island ferry services and discounts for ferry travel to the islands. A 25 per cent discount for commercial vehicles existed prior to the SNP’s new scheme. I am aware that calling that scheme RET is in itself highly debatable, as Dave Stewart pointed out, but the crucial issue is that it provided a further, welcome 15 per cent discount for vital lorry journeys, which has clearly been crucial in dampening the cost of goods and services in the island communities. That is why we supported the retention of the additional discounts last May.
I am aware that Halcrow’s analysis that the extra discount was not being passed on to customers is being challenged by the Outer Hebrides transport group and others, as Mary Scanlon said. Island hauliers will happily show invoices to demonstrate the reality of their case and the injustice being visited on islanders by the SNP. The reality of removing that discount is, as Elaine Murray pointed out, that costs for island communities and families will rocket.
The Government is about to usher in and impose an SNP haulage and household tax for the islands. RET will go for commercial vehicles, albeit over a longer timescale. As for the extensions to include 6m vehicles as small commercial vehicles, the reality is that most goods are transported in the 17m vehicles, which are the ones that will bear the SNP’s new tax. The concessions are limited; even with the transitional scheme, 17m commercial vehicles travelling between Ullapool and Stornoway will see their fares increase by 50 per cent, from £190 to £286 from April 2012. If the transitional fare was scrapped, the fare would increase by 134 per cent, to £447. The reality is that the transitional fare is scheduled to go. That is not scaremongering; that is the current proposition.
We know that the SNP in the Western Isles is split from top to bottom on this issue. We lodged a helpful motion today that SNP members should have no difficulty in supporting because it entirely reflects the spirit, tone and content of a motion that the SNP supported at a meeting of Western Isles Council a week ago today.
Will the member give way?
No, thank you.
The motion was passed unanimously, with the support of the chairman of the transportation committee, Councillor Donald Manford. Clearly, local members of the SNP and their nationalist MSP are politically impotent and have failed miserably to secure anything resembling “major progress”—the words that Alasdair Allan used to describe an increase of 50 per cent on ferry fares. I hope that Dr Allan goes to the pubs and clubs of Stornoway this weekend and tells his constituents that a 50 per cent increase on lorry fares is “major progress”. God willing, we will see him back here next week.
SNP members might want to reflect on an article in last week’s West Highland Free Press. It was from 35 years ago—the cabinet secretary may recall it—and describes the decision at that time to increase ferry fares by 7.5 per cent. The decision was described by the then Western Isles MP, Donald Stewart, as “absolutely appalling”. We can only imagine what Mr Stewart would think of the decision of his political successors to increase fares by 50 per cent.
Will the member give way?
The member is not going to take an intervention. Sit down, Mr McDonald.
It is not just members on the Labour benches who believe that islanders will bear the brunt of the massive increases. The minister will have read the letter that was sent to him by Angus Campbell, the leader of Western Isles Council, in which Mr Campbell says that the council has commissioned a
“preliminary assessment of Government’s proposals to help us understand the potential impacts. The results of this preliminary analysis suggest that the impacts, in terms of jobs, will be”—
as Jamie McGrigor said—
“a loss to the local economy of”
around 100 full-time equivalent jobs. Mr Campbell goes on to say:
“As you will appreciate this would be a significant and highly damaging impact for a fragile, peripheral economy such as the Outer Hebrides. You will be aware from the meeting that the commercial sector strenuously denies that the benefits of RET were not passed on to local consumers.”
That is why, in our motion, we are backing the council’s position that there should be a moratorium on the changes to allow for more detailed evaluation of their socioeconomic impact. SNP councillors supported that position and many people will be bemused that the Scottish Government is ignoring the serious concerns that exist. Those concerns are so great that the Outer Hebrides transport group has campaigned hard on the issue and has secured, in only five weeks, the support of more than 100 businesses, countless individuals and the local authority. The SNP will seek to dismiss the concerns that we have expressed today, but it should listen to those voices, as they come from those who will be directly affected by this ruinous and flawed policy—a policy that was recently denounced as “economically illiterate” by the business economist Professor Neil Kay of the University of Strathclyde.
The SNP may dismiss our concerns, but surely it should listen to the concerns of lifelong nationalist and Lewisman Iain Don Maciver, who had been selected as an SNP candidate for the forthcoming elections in May. Mr Maciver is also the port manager for CalMac at Stornoway harbour and a man who, we may safely say, will have forgotten more about ferry fares and the importance of economical ferry links than the minister or Dr Allan will ever know. Announcing his resignation from the SNP and his decision not to stand as an SNP candidate, Mr Maciver said:
“This is not a decision that I have arrived at easily, especially as it means that I have to give up my SNP membership, but given the abandonment of RET for Commercial vehicles, which is going to have such a detrimental impact on the islands I see no other choice for me.”
Does the member intend to continue quoting that statement, in which Mr Maciver talks about the utter hypocrisy of Labour’s position on the issue?
I note that Dr Allan agrees with Mr Maciver’s analysis in the quote that I have just given. Or is Dr Allan going to support the Government today and stand in absolute contradiction to those words from Iain Don Maciver?
We believe that the case is clear: scrapping additional support for commercial vehicles will damage the welfare and economies of our island communities at a time when they can afford it least. Today, SNP MSPs, particularly those who represent the communities that are most affected, have a choice. They can vote to proceed with tax increases that will directly affect our island communities, or they can back Labour’s motion, step away from that damaging decision and give our island communities, their families and their important local economies the support that they need.